Making the most of your retirement

Transcription

1 Making the most of your retirement A guide to equity release and our advice service Provided by

2 Contents Welcome from the Age UK Group 3 Do more with your retirement 4 What is equity release? 5 Is equity release right for you? 6 Different types of equity release 8 How UK property prices have changed 10 Imagine what you could do 11 Helpful, expert advice 12 How equity release has helped others 13 Frequently asked questions 14 Next steps 15 2 A guide to equity release and our advice service

3 Welcome from the Age UK Group We are delighted to introduce the Age UK Equity Release Advice Service, provided by Just Retirement Solutions Limited, one of the UK s leading equity release advisers and a group company of Just Retirement Group plc. This service will look at whether equity release is right for you and includes a free state benefits check, to make sure you re not missing out on anything you re entitled to. What s more, you ll have access to two equity release plans with exclusive features for the Age UK Group provided by Just Retirement Limited, a leading provider of equity release plans in the UK and a group company of the Just Retirement Group plc. These exclusive features include a refund of your valuation fee on completion and the ability to borrow smaller funds should you wish to release further cash from your property at a later date. Just Retirement Solutions helps people every day to improve their incomes in retirement, so we re confident you ll be in good hands. This guide which has been put together by Just Retirement Solutions, will help you in taking your first steps to finding out more about what equity release has to offer. A guide to equity release and our advice service 3

4 Do more with your retirement This guide provides you with the essential information you will need to decide for yourself whether or not equity release could be for you. If you have any questions, no matter how small, Just Retirement Solutions specialist team are here to help and you can call them Monday to Friday, 9am to 5pm on *. Retirement means different things to different people. For some it s a chance to relax and spend more time with family and friends. Others see it as a chance to take a holiday of a lifetime or pursue a hobby. Of course, when you stop earning you still have to pay your way which could mean you re facing the challenge of trying to make your income stretch to cover your living expenses. Your retirement should be the time when you have the freedom to do all the things you previously never had time for, without having to scrimp and scrape to find the money. Equity release could be the solution and help supplement your savings, so you can enjoy your retirement to the full. Equity release enables you to unlock some of the equity in your home whilst you still live there, turning it into tax-free cash. Equity release may involve a lifetime mortgage or home reversion plan. To understand the features and risks, ask for a personalised illustration. We understand that deciding whether equity release is right for you is a big decision. Your home is likely to be your biggest asset so you will want to make sure you have received the best possible advice. That s why Age UK have selected one of the UK s leading equity release advisers, Just Retirement Solutions Limited, to provide the Age UK Equity Release Advice Service. * Calls may be monitored and recorded for training purposes. 4 A guide to equity release and our advice service

5 What is equity release? Equity release is the process of unlocking some of the value or equity from your home whilst you still live there, turning it into tax-free cash. Equity is the value of your home, minus any outstanding mortgage or loan secured on it. Age UK customers use the money raised through equity release to make home improvements, provide gifts to family, clear their mortgage, take a holiday of a lifetime or to improve their retirement funds. With equity release you: could gain access to a tax-free cash lump sum that you can use for almost anything you like. can continue to live in the home you love for the rest of your life. don t have to repay any of the money borrowed or the interest on it until you die, your property is sold or you move into long-term care. have the option to guarantee an inheritance for loved ones. have the reassurance that any equity release products recommended by Just Retirement Solutions include a no negative equity guarantee which means that a debt can never be left with your estate, subject to the plan conditions being met. Equity release may not be right for everyone. It may affect your entitlement to state benefits and will reduce the value of your estate. A guide to equity release and our advice service 5

6 Is equity release right for you? It s important to bear in mind that equity release is a lifelong commitment and there are questions you should ask yourself to help decide whether taking out a policy is right for you. Points to consider are: will your current level of income keep up with inflation? will the savings or investments you have meet future requirements such as long-term care? what would happen financially if you or your spouse became ill or died? could you leave behind cash for your family, and if so how much? A professional service with no pressure to buy Your decision to take out an equity release plan should not be taken lightly. After all, it will reduce the value of your estate and might affect your entitlement to state benefits. Your adviser can help you decide if it s right for you. If it s not a good idea for you, your adviser will clearly state the reasons why. If it s right for you, they ll provide you with a personalised illustration and recommend a plan. Your personalised illustration will show you exactly how much money you can expect to receive and will make all the features and risks clear. Your adviser will also fully review your state benefits, free of charge, to ensure you are claiming everything you are entitled to and to show you how equity release may affect your current entitlement. It s a family affair Just Retirement Solutions has helped thousands of people get to grips with equity release, and understands that family is very important. So they always encourage you to involve your family in the decision-making process. After all, releasing some of the equity from your home is a serious decision and will affect the amount that you may leave behind when you pass away. 6 A guide to equity release and our advice service

7 Are you eligible for equity release? Do you own and occupy a UK property of standard construction? Are you aged 55 or over (youngest applicant, if a couple)? Is your property worth at least 70,000? If you answered yes to these questions and want to know if equity release can help you, call Just Retirement Solutions on * today. Minimum age and property value varies between product providers *Calls may be monitored and recorded for training purposes. A guide to equity release and our advice service 7

8 Different types of equity release Lifetime mortgage A lifetime mortgage is a type of loan secured against your home. It allows you to release a cash lump sum from the value of your property. Some plans even allow you to take smaller amounts of money as and when you need it. You continue to own and live in the home you love and will benefit from any increase in its value. In addition, plans recommended by the Age UK Equity Release Advice Service come with a no negative equity guarantee; if house prices fall and the value of your loan exceeds the value of your home, you don t have to worry about leaving debts to your loved ones. With most lifetime mortgages, there are no regular payments to make and nothing has to be paid back until the end of the plan. This usually happens when the last plan holder living in the property dies or moves into long-term care. Advantages You receive a tax-free lump sum. You can live in the home you love for the rest of your life. You continue to have full ownership of your home and benefit from any increases in its value. No negative equity guarantee with lifetime mortgages recommended by Just Retirement Solutions. Considerations It will reduce the value of your estate. The debt will grow as interest is applied over the long-term. Early repayment charges may apply if you repay early. Your adviser will explain this in detail. If the value of your home falls, your remaining equity will also reduce, potentially impacting future drawdown amounts. Your entitlement to state benefits may be affected. This is a lifetime mortgage. To understand the features and risks, ask for a personalised illustration. 8 A guide to equity release and our advice service

9 There are two main types of equity release: lifetime mortgages and home reversion plans. Home reversion plan Home reversion plans involve selling part, or all, of your property to a home reversion provider in return for a cash lump sum. Whilst all or part of your home will belong to someone else, you can remain living there for the rest of your life, rent-free. A home reversion plan is not a loan so there s no interest to pay. However, if your home increases in value, you will only benefit from the increase in value of the proportion you retain. When you die or move into long-term care, the property will be sold and the home reversion company receives its share of the proceeds. You should be aware that when you take out a plan you will normally receive less than the current market value of your home. This is because the reversion company who buys your home cannot sell it until you, or both of you if borrowing jointly, have died or move into permanent long-term care and need to protect themselves against any potential loss in value (if the housing market falls). Advantages You receive a tax-free lump sum. You can guarantee an inheritance for your children if you only sell part of your property s value. It s not a loan so there s no interest to pay. You can live in your home for the rest of your lifetime. You can usually release higher amounts than a lifetime mortgage. Considerations It will reduce the value of your estate. The home reversion company owns a share, or all, of your home. Home reversion plans cannot usually be repaid, as you are selling all or part of your home. Your entitlement to state benefits may be affected. This is a home reversion plan. To understand the features and risks, ask for a personalised illustration. A guide to equity release and our advice service 9

10 How UK property prices have changed House prices in the UK have increased significantly over the last few decades and these rises could mean that there is considerable equity tied up in your home. Do you remember the very first home you purchased possibly more than 40 years ago and how much it cost you? You may enjoy sharing this information with younger generations, especially when you consider in today s terms the cost of your first home may have been lower than the cost of a new car today (the average property price in 1970 was under 5,000). Even when you consider the changes over just the last 20 years, property prices are significantly higher than what they were in So you might be pleasantly surprised by how much equity you have in your home and how it could be the key to help you achieve a better retirement. Average UK house prices 200, , , , , ,000 50,000 51,633 71, Source: Nationwide House Price Index, December Prices used are all houses in UK, seasonally adjusted. 10 A guide to equity release and our advice service

11 Imagine what you could do There are many reasons why you may consider equity release and you can use the funds generated for almost anything you choose. Everybody s circumstances are different, but we ve found our customers most commonly use their funds to: Make home improvements From a new kitchen or bathroom to a new boiler or better insulation, the funds you release could help you update your home and make it as comfortable as possible. Clear mortgage or other debts Paying off outstanding debts such as credit cards, loans or a mortgage could help to reduce your monthly outgoings and make it easier for you to manage your day-to-day expenses. Think carefully before securing other debts against your home. Give family financial help or gifts You may want to see your family enjoy part of their inheritance by helping them out financially with setting up their own home, family holidays or perhaps a family wedding. Take a holiday of a lifetime We all love a good holiday, and without the constraints of working life your horizons from now on will be limited purely by your imagination. Buy a new car What you need from a car changes throughout your life and in retirement you may want to update your car to make it more suitable for your needs. A guide to equity release and our advice service 11

12 Helpful, expert advice With a decision as big as equity release, trust is always a big factor. That s one of the reasons why the Age UK Group have chosen Just Retirement Solutions as our equity release partner. Just Retirement Solutions have provided advice to thousands of people who have used the equity built up in their home to provide for a better retirement. They always treat customers fairly and honestly. In fact, they actively encourage customers to speak to their families and discuss all their options. All about personalised service Everyone is different, from current needs to future aspirations. This is why Just Retirement Solutions experienced advisers will always take the time to sit and discuss exactly what your requirements are, in order to come up with a plan that suits you. You can choose to do this either by phone or in person. A no-obligation advice service The service carries no-obligation and if, for any reason equity release isn t for you, your adviser will tell you clearly stating the reasons why and identifying other options. If you do not proceed there is no charge for providing you with advice. If you decide to take out a plan, there will be a fee of 675 for advice and arranging the equity release plan Just Retirement Solutions recommends. You will only be charged if you decide to take out a plan. 12 A guide to equity release and our advice service

13 How equity release has helped others Here are just a few examples of how others have used equity release to achieve their goals and enjoy retirement to the full. Equity Equity release allowed us to have funds available instead of scrimping and scraping to find money. To date we have replaced furniture, fixtures and fittings inside and outside our home and carried out maintenance work. We were dubious about equity release, but our adviser proved to us it would help us to have peace of mind and be more comfortable in our lives. The follow up service was first class with all information in writing. Mr and Mrs H, Wigan Release has made a real difference to our lives and has allowed us to fit a new kitchen, landscape our garden and buy a new bed. We were very impressed with the service and at how knowledgeable and friendly our adviser was. Mr and Mrs T, Wales A guide to equity release and our advice service 13

14 Frequently asked questions Will I still own my home? Yes, if you take out a lifetime mortgage, but with a home reversion plan, the provider you go through will own all or part of the property. With both products you will still be able to live in your home for the rest of your life. What can equity release be used for? A number of things, such as going on a holiday of a lifetime or making gifts to family. If you have an existing mortgage on your home, you would have to use the money you release to pay off the existing mortgage first, but then you would be free to spend it as you wish. The money you release is to help you add to your retirement and make it more comfortable. We suggest you discuss your needs with a Just Retirement Solutions adviser. Will I be able to move house? Generally yes, many plans can be transferred to a new home, provided your new property can act as acceptable security. With a lifetime mortgage, if you are moving to a property of lesser value you may have to repay some of the outstanding loan. What happens if my partner or I need long-term care? Long-term care should not affect the terms of your plan. Where the plan is in joint names and one of you leaves to go into long-term care the other can continue to live in your home. Remember though that the plan will normally end if you both go into long-term care. How much will it cost? With any mortgage, there are always costs and fees involved and it is exactly the same with equity release. If you decide to take out a plan, there will be a fee of 675 for advice and arranging an equity release plan that Just Retirement Solutions recommends. You will only be charged if you decide to take out a plan. Their advice carries no obligation. Additional fees such as valuation, arrangement and solicitors, fees will be payable and in some cases, can be added to the amount of funds you choose to release. 14 A guide to equity release and our advice service

15 Next steps As equity release is such a big decision, it is essential to take professional financial advice before moving ahead with an equity release plan. This is where speaking to an adviser through the Age UK Equity Release Advice Service can help. The four-step advice process is designed so that your adviser fully understands your financial situation and what you want to achieve. Step 1 Call * and one of Just Retirement Solutions specialist team will discuss your circumstances, review your eligibility, and, if appropriate, arrange an appointment for you to talk to an adviser either over the phone or in your home. Step 2 During your first appointment your adviser will discuss your goals and requirements, helping you to consider all the options, look at alternatives and answer your questions. They will help you see whether equity release is right for you. In addition they will look at all the benefits, if any, you are currently claiming to make sure you re not missing out on any that you might be entitled to. Step 3 At a second appointment, your adviser will present recommendations to you and advise you on whether taking out equity release will adversely affect your tax status or state benefit entitlement. At this stage, if you feel comfortable and want to proceed, they will help you to complete your application. This will be sent to your chosen provider who will arrange a valuation to be made on your property. Step 4 Your provider will issue your offer directly to you, and once the legal paperwork is complete, your funds will be released. After you receive your monies, Just Retirement Solutions will follow up with you to make sure that everything is okay. * Calls may be monitored and recorded for training purposes. A guide to equity release and our advice service 15

16 Information and advice you need to help you love later life. To arrange an appointment or find out more contact the Age UK Equity Release Advice Service today on * or Lines are open between 9am to 5pm, Monday to Friday (excluding bank holidays). *If you call the 08 number, you will be dealing with Just Retirement Solutions Limited, which provides the Age UK Equity Release Advice Service. The call centre opening hours are 9am-5pm, Monday - Friday. Calls may be monitored and recorded for training purposes. The Age UK Equity Release Advice Service is provided by Just Retirement Solutions Limited. The product with exclusive features is provided by Just Retirement Limited. Both are registered to the office address, Vale House, Roebuck Close, Bancroft Road, Reigate, Surrey RH2 7RU. Just Retirement Solutions Limited is registered in England no Just Retirement Limited is registered in England no Just Retirement Solutions Limited is authorised and regulated by the Financial Conduct Authority. Just Retirement Limited is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Age UK Enterprises Limited (part of the Age UK Group) is a commercial services arm of Age UK (charity no ) which donates its net profits to the charity. The Age UK network includes Age Cymru, Age NI, Age Scotland and Age UK. Registered in England and Wales no Registered office: Tavis House, 1-6 Tavistock Square, London WC1H 9NA. Age UK Enterprises Limited receive commission from Just Retirement Solutions Limited of up to 0.75% of the amount advanced under each equity release plan sold together with a contribution towards marketing support. Net profits raised by Age UK Enterprises Limited from commission are donated to Age UK the Charity /2015